Hope Emerges in California’s Insurance Market as Farmers Reinitiates Policy Underwriting
Residents can acquire policies for condominiums and renters’ coverage as part of the company’s ‘phased reintroduction.’
Farmers Insurance began issuing policies on December 14 for select insurance types in California, also raising the cap on homeowners’ policies available monthly.
“This announcement from Farmers indicates that substantial efforts have been made, and we should expect to see some changes,” commented Rex Frazier, president of the Personal Insurance Federation of California—representing insurers like Farmers, State Farm, and Allstate—when speaking to The Epoch Times.
“We hope to witness more such announcements, revealing small cracks in the dam which could pave the way for more significant changes.”
As part of what the company calls a “phased reintroduction,” Californians can now secure policies for condos and renters’ insurance after the company halted offerings in May 2023.
Coverage for personal umbrella insurance will recommence on December 24.
Starting March 1, 2025, policies for manufactured homes will be available, followed by those for vacant homes and landlords two weeks later.
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Farmers Insurance is also increasing its monthly issuance of homeowners’ policies from 7,000 to 9,500.
“Farmers Insurance has taken these actions to enhance coverage availability for consumers in California because we acknowledge that the state’s insurance marketplace has improved,” stated Behram Dinshaw, president of personal lines for Farmers Insurance.
The company also resumed issuing policies for commercial auto clients in July and for business insurance in May after noting “an improved commercial insurance market.”
“We aim to be positioned to offer even more coverage options to state residents,” Dinshaw reiterated.
Lara’s strategy aims to utilize forward-looking catastrophe models instead of previous regulations that forced companies to set rates based on historical losses.
“Given our evolving climate, we can no longer rely solely on past data,” he remarked. “We are adopting innovative and forward-thinking approaches to safeguard Californians’ insurance access.”
A consumer advocacy organization based in San Francisco expressed that the trends are promising.
“[This] signifies that insurers have received one of their top-priority requests to resume operations in our state,” stated Amy Bach of United Policyholders—a nonprofit advocating for insurance consumers. “This news, along with Farmers Insurance’s announcement, should instill hope for consumers regarding the return of competition and options.”
One factor contributing to hesitance in expanding offerings among companies, as noted by Frazier, is California’s regulations restricting rate increases. Additionally, the lengthy approval process for rate hikes leads to situations where by the time new prices are authorized, inflation necessitates another increase.
A quicker regulatory approach is crucial to stabilize the marketplace, he stated.
To encourage an expansion of policy offerings, Lara announced that major insurance companies must begin writing a greater proportion of policies—at least 85 percent—within regions prone to wildfires.
Regulatory bodies are also looking to decrease the reliance on policies issued by the FAIR plan, an insurer of last resort supported by insurance companies. Due to recent non-renewals by insurers statewide, hundreds of thousands of homeowners have had to turn to this plan.
FAIR plan policies tend to be significantly pricier than traditional insurance options and offer reduced coverage.
One homeowner from Northern California reported that their premiums tripled when they had to switch to the FAIR plan after losing insurance coverage.
“I’m paying more for less, and it’s really damaging us financially,” lamented Warren Ware of Mendocino County in a conversation with The Epoch Times on December 14. “I hope to escape this FAIR plan soon.”
Linda and Warren Ware’s home is seen in Mendocino County, Calif., on April 19, 2023. The property was deemed too risky for insurance companies to cover because of fire danger. Travis Gillmore/The Epoch Times
A newly elected lawmaker from Modoc in rural Northern California, with a background in emergency management, highlighted fire insurance issues as a priority.
“That is significant … a primary reason I decided to run for office,” stated Assemblywoman Heather Hadwick when speaking with The Epoch Times on December 16. “I fully intend to be actively involved.”
Concerns regarding fire hazards and the accessibility and affordability of insurance are affecting her district and her own family, she mentioned.
Assemblywoman Heather Hadwick speaks at a press conference on career pathways at Shasta College in Redding, Calif. on Dec. 16. Travis Gillmore/The Epoch Times
“My children are currently in college, and they are reluctant to return and live here, which is heartbreaking for me,” Hadwick expressed.
The first-term legislator expressed eagerness to receive her committee assignments and anticipates working across party lines with fellow legislators to devise solutions beneficial to Californians.
Throughout the past year, state legislators from both parties and Governor Gavin Newsom have frequently articulated a commitment to swiftly address insurance challenges.
